Author Topic: ALS.TO - Altius Minerals  (Read 1962966 times)

Liberty

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Re: ALS.TO - Altius Minerals
« Reply #7380 on: July 27, 2020, 11:57:25 AM »
Yeah but with that purchase price you would be a fool not to do it.

I make that deal all day. It's a no brainer. I don't like the coal royalties just as mucH as the next guy but with that price I'm glad they did it.

So you're saying their partners, Liberty Metals & Mining, are really dumb?

I’d assume they’re more rational than dumb. Whatever they think is the value of that holding, it sounds like it’s worth more than that amount to them to exit investments that aren’t “green.” (Or maybe they have some insider info that Alberta is going to shut down coal plants even earlier than expected.)

Well, they both were already wrong about the investment in the first place (it was supposed to last a lot longer), so I think it's not out of the conceivable that they may still be wrong about it, or at least, that there's a lot of uncertainty that must be discounted... But I'd say that the value of it is probably closer to what ALS is paying than anything else. Otherwise, if it was worth a lot more, Liberty would've sold it to someone else for a higher price.


StevieV

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Re: ALS.TO - Altius Minerals
« Reply #7381 on: July 27, 2020, 12:56:22 PM »
Yeah but with that purchase price you would be a fool not to do it.

I make that deal all day. It's a no brainer. I don't like the coal royalties just as mucH as the next guy but with that price I'm glad they did it.

So you're saying their partners, Liberty Metals & Mining, are really dumb?

I’d assume they’re more rational than dumb. Whatever they think is the value of that holding, it sounds like it’s worth more than that amount to them to exit investments that aren’t “green.” (Or maybe they have some insider info that Alberta is going to shut down coal plants even earlier than expected.)

Well, they both were already wrong about the investment in the first place (it was supposed to last a lot longer), so I think it's not out of the conceivable that they may still be wrong about it, or at least, that there's a lot of uncertainty that must be discounted... But I'd say that the value of it is probably closer to what ALS is paying than anything else. Otherwise, if it was worth a lot more, Liberty would've sold it to someone else for a higher price.

I think your last line is a bit of a leap.

We are talking about an asset that is both expiring and in a disfavored industry.  I doubt declining coal royalties are a huge, liquid and efficient market. 

Liberty could have been driven by the desire to get a full exit of coal and dispose of an ugly asset.  A simple - let's be done with it.  If that, I'm not sure there are many parties Liberty could have turned to.

Seems to me as though Altius picked this up at a good price, but it's certainly possible the royalty will fade more quickly than expected.

bizaro86

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Re: ALS.TO - Altius Minerals
« Reply #7382 on: July 27, 2020, 03:30:47 PM »
Yeah but with that purchase price you would be a fool not to do it.

I make that deal all day. It's a no brainer. I don't like the coal royalties just as mucH as the next guy but with that price I'm glad they did it.

So you're saying their partners, Liberty Metals & Mining, are really dumb?

I’d assume they’re more rational than dumb. Whatever they think is the value of that holding, it sounds like it’s worth more than that amount to them to exit investments that aren’t “green.” (Or maybe they have some insider info that Alberta is going to shut down coal plants even earlier than expected.)

I doubt there will be the political will to close coal any sooner in Alberta. The current governing party (United Conservatives) won't end them sooner. There was hope in the industry they might reverse the current deadline, which hasn't happened, but it would be very off brand for them to accelerate the end.

The official opposition (and only current credible threat to the government) is the New Democrats. They were governing when the end date was put in place, and they paid a political price, as well as incurred a big economic cost to do so. I doubt they'd change the deadline if they came back to power, because it is their policy.

Liberty

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Re: ALS.TO - Altius Minerals
« Reply #7383 on: July 27, 2020, 04:33:27 PM »
Yeah but with that purchase price you would be a fool not to do it.

I make that deal all day. It's a no brainer. I don't like the coal royalties just as mucH as the next guy but with that price I'm glad they did it.

So you're saying their partners, Liberty Metals & Mining, are really dumb?

I’d assume they’re more rational than dumb. Whatever they think is the value of that holding, it sounds like it’s worth more than that amount to them to exit investments that aren’t “green.” (Or maybe they have some insider info that Alberta is going to shut down coal plants even earlier than expected.)

Well, they both were already wrong about the investment in the first place (it was supposed to last a lot longer), so I think it's not out of the conceivable that they may still be wrong about it, or at least, that there's a lot of uncertainty that must be discounted... But I'd say that the value of it is probably closer to what ALS is paying than anything else. Otherwise, if it was worth a lot more, Liberty would've sold it to someone else for a higher price.

I think your last line is a bit of a leap.

We are talking about an asset that is both expiring and in a disfavored industry.  I doubt declining coal royalties are a huge, liquid and efficient market. 

Liberty could have been driven by the desire to get a full exit of coal and dispose of an ugly asset.  A simple - let's be done with it.  If that, I'm not sure there are many parties Liberty could have turned to.

Seems to me as though Altius picked this up at a good price, but it's certainly possible the royalty will fade more quickly than expected.

Either it's a good asset for Altius, or it's not. You can't have it both ways and have it be great financially for Altius but so ugly nobody else would touch it.

If this is something that has a good chance of providing safe high IRRs, then the short-duration shouldn't matter and will be reflected in a DCF and priced appropriately by private equity or whatever.

bizaro86

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Re: ALS.TO - Altius Minerals
« Reply #7384 on: July 27, 2020, 05:35:31 PM »
Yeah but with that purchase price you would be a fool not to do it.

I make that deal all day. It's a no brainer. I don't like the coal royalties just as mucH as the next guy but with that price I'm glad they did it.

So you're saying their partners, Liberty Metals & Mining, are really dumb?

I’d assume they’re more rational than dumb. Whatever they think is the value of that holding, it sounds like it’s worth more than that amount to them to exit investments that aren’t “green.” (Or maybe they have some insider info that Alberta is going to shut down coal plants even earlier than expected.)

Well, they both were already wrong about the investment in the first place (it was supposed to last a lot longer), so I think it's not out of the conceivable that they may still be wrong about it, or at least, that there's a lot of uncertainty that must be discounted... But I'd say that the value of it is probably closer to what ALS is paying than anything else. Otherwise, if it was worth a lot more, Liberty would've sold it to someone else for a higher price.

I think your last line is a bit of a leap.

We are talking about an asset that is both expiring and in a disfavored industry.  I doubt declining coal royalties are a huge, liquid and efficient market. 

Liberty could have been driven by the desire to get a full exit of coal and dispose of an ugly asset.  A simple - let's be done with it.  If that, I'm not sure there are many parties Liberty could have turned to.

Seems to me as though Altius picked this up at a good price, but it's certainly possible the royalty will fade more quickly than expected.

Either it's a good asset for Altius, or it's not. You can't have it both ways and have it be great financially for Altius but so ugly nobody else would touch it.

If this is something that has a good chance of providing safe high IRRs, then the short-duration shouldn't matter and will be reflected in a DCF and priced appropriately by private equity or whatever.

I think it makes sense that Altius would be the high bidder here. Private equity would probably want to discount the cash flows more for the lack of control, but since Altius has that control they dont need to discount for it.

Liberty

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Re: ALS.TO - Altius Minerals
« Reply #7385 on: July 28, 2020, 07:57:37 AM »

I think it makes sense that Altius would be the high bidder here. Private equity would probably want to discount the cash flows more for the lack of control, but since Altius has that control they dont need to discount for it.

That makes sense to me, that there's a control premium. But from the POV that they're expecting an ok IRR on it, not that they made a killing and got it for a song and will make huge IRRs.

And if you go back to when they originally bought the asset with Liberty and what they expected then, we're already pretty far from making a killing territory, I think.

Liberty

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Re: ALS.TO - Altius Minerals
« Reply #7386 on: October 02, 2020, 06:42:32 AM »
Nothing here since July? Stock still in its 10-year-range around $10 CAD?

All normal, I guess ¯\_(ツ)_/¯

reader

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Re: ALS.TO - Altius Minerals
« Reply #7387 on: October 11, 2020, 03:13:51 AM »
Nothing here since July? Stock still in its 10-year-range around $10 CAD?

All normal, I guess ¯\_(ツ)_/¯


Sometimes it's as exciting as watching (artificial) grass grow.
This stock is oblivious to "good" news, copper up.
I like the way they allocate capital and look at this holding as a part of wider portfolio.


nostradamus

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Re: ALS.TO - Altius Minerals
« Reply #7389 on: October 13, 2020, 06:16:41 AM »
Does anyone following altius have an estimate of the royalty income of the ARR royalties that are expected to come into production in the next couple of years?